M.C. Mehta v. Union of India (Oleum Gas Leak)
Introduced the rule of Absolute Liability - enterprises in hazardous activities are absolutely liable for harm, with no exceptions.
The background
Soon after the Bhopal gas tragedy, oleum gas leaked from the Shriram factory in Delhi in 1985, harming the public. Public-interest litigation by lawyer M.C. Mehta forced the Court to decide how liable an enterprise should be when a hazardous activity causes harm.
The decision
The Court went beyond the old English rule of 'strict liability' (which allowed exceptions) and laid down the principle of Absolute Liability: an enterprise engaged in a hazardous or inherently dangerous activity is absolutely liable for any harm it causes, with no exceptions whatsoever. It also held that compensation must be proportionate to the size and capacity of the enterprise, so that it acts as a real deterrent.
What it changed
India adopted a uniquely strict, home-grown standard of corporate and environmental responsibility. The ruling became the foundation of Indian environmental law, feeding into the polluter-pays principle, later statutes, and the creation of the National Green Tribunal.